Tag: 2000

Below is the text of the speech made by Alan Milburn, the then Secretary of State for Health, to the LSE Annual Health Lecture on 8 March 2000.

It is a great honour to be here this evening to give the sixth annual LSE Health Lecture. Health secretaries don’t often speak at the London School of Economics. But there are powerful reasons – as I will set out in a moment or two – for seeing a new and closer relationship between the state of our country’s economy and the state of our country’s health.

As a Cabinet Minister who has served in both the Treasury and the Department of Health people sometimes paint me as a gamekeeper turned poacher. This might make clever newspaper copy. But it assumes a dichotomy that I consider to be false. Treasury parsimony versus Health profligacy. It demonstrates a profound misunderstanding of the role of health and health care in the modern economy.

Health care as social investment

The conventional orthodoxy is that health spending is a debit, not a credit – a drain on the economy and a burden on the taxpayer. I want to demonstrate today that in the new global knowledge-based economy it is time to turn that thought on its head. I will argue that health is not only a good in its own right but that good healthcare is an imperative for improved productivity and national economic success. Put a different way, I am arguing that healthcare spending is not just a question of resource distribution, but is also linked to the physical and social organisation of economic production. In other words health care should be regarded not just as current consumption but as social investment. An investment that builds Britain’s economic infrastructure.

But it can only rightly be so if two conditions are fulfilled. One, that it is organised efficiently to deliver the maximum health gain without generating undue economic burdens. And two, that it is organised so that it delivers preventative services and not just sickness services, intervening upstream as well as downstream.

My contention is that the UK’s health service – modernised and reformed – will be better placed than most other systems of health care world wide to fulfil these conditions. In other words, the Government’s modernisation programme for the NHS has positive economic benefits for UK plc.

That is not the traditional view. Indeed, over the past decade or so health care reform in the developed world has been driven by cost containment. In the USA, for example, new managed care systems have begun to make significant inroads into the spiralling costs of the American medical-industrial complex. Yet, despite this, in January this year, President Clinton had to go to Congress for $110 billion funding so that just 5 million uninsured Americans could get health care cover.

Similarly, in Western European countries changes to rigid and, sometimes, bloated welfare systems have been fuelled by intense concern about national competitiveness in a period of rapid globalisation. This is perhaps not surprising given the structural inefficiencies intrinsic, for example, to the French and German social insurance health care financing systems.

In the light of recent noises “stage right” in our country about moving away from a tax-based system, it is worth making the point that the funding system that we have in the UK is, from the perspective of enterprise and competition, arguably, the most efficient way of financing health services. Tax based funding relies on the whole tax base, so it reduces distortions in the economy. By contrast, social insurance tends to fall heavily on the employed and employers. That is why French employers are walking away from it. The Institute of Directors in the UK may wish to take note. Social insurance turns healthcare into a tax on jobs. It has distributive and incentive effects that are hard to offset. It can also make job switching more difficult, reducing labour flexibility.

It’s worth noting too that a tax-based NHS as a model has competitive advantage over its Western European comparators for at least three other reasons. By virtue of its global budgeting, which controls healthcare inflation. By virtue of its low transaction costs, which means resources reach the frontline. And by virtue of its clinically managed care, which is provided by the GP gatekeeper role. Ironically, at the very time that some would urge us to abandon our model in favour of the continental health care model France and Germany are looking to import the very best features of the UK’s health care system.

The truth is that the NHS, in the words of the OECD, is “a remarkably cost effective institution.” That is not to say that there is not variation in performance which needs to be tackled. There is more that we can get out for what we put in – but overall as the Prime Minister has rightly said, we need to invest more of our national income in the NHS.

That is right, because as countries grow more prosperous they choose to invest more in health care. This is a perfectly rational thing to do, aggregating as it does the individual preferences of citizens in advanced industrial economies.

It is of course also right that we only spend what we can afford. Any other route leads to economic ruin. Careful management of the public finances is one of the keys to economic stability. As previous governments have found to their cost, without it we will simply not get the growth, prosperity and employment that the country needs. That is why this Government has constructed a new macroeconomic framework to provide the stable foundations for economic growth. It is also why we seek to reshape public spending, as far as possible, so that it invests in future success rather than mopping up the costs of past failure.

I want to argue today that health expenditure is such an investment for success. Health is, of course, an important goal in its own right – an intrinsic good. Its value is one of the truths that we as a society hold to be self-evident. As Halfdan Mahler, a former Director of the World Health Organisation has said, health isn’t everything – but without it you have got nothing. Good health is the route by which each and every one of us can properly fulfil our true potential. It unlocks life chances, and is a fundamental building block of wellbeing

The link between health and economic success

But such health investment is also of instrumental importance in improving national economic performance. As economic historians such as Fogel and others have concluded, perhaps one third of the per capita growth rate in Britain between 1780 and 1979 was as a result of improved health and nutritional status. And the World Health Organisation has reported that this figure is within the range of estimates produced by similar cross country studies for the last three or four decades.

Just last month, a report in the Journal “Science” by Bloom and Canning noted the striking finding that real income per capita will grow at a third to half (0.3%-0.5%) a year faster in a country where life expectancy is five years longer than in another country which is comparable in all other respects. This is significant, at a time when growth rates over the past few decades have averaged only 2-3%, and when there is every prospect of life expectancy increasing by a further 5 years over future decades. The mechanisms underlying this relationship include the direct impact of health on labour productivity; the incentive that people living longer have to invest in developing their skills; the fact that longer lives and greater savings for retirement can lead to increased investment; and the existence of a healthy and educated workforce as a “magnet” for foreign investment.

Another study by the Pan-American Health Organisation of an emerging economy found that for every one year’s increase in life expectancy there will be an additional 1% increase in GDP 15 years later. And as the importance of human capital grows in advanced economies, health status may have a greater and not a lesser impact on economic output.

This is because, in today’s world it is no longer simply access to financial resources or to physical resources that make or break a country – any more than they make or break a company. In today’s world the raw materials of any country are the skills of its people. Now in the new knowledge-based economy labour is king. Today as never before our key asset is our human resources. Human skills are a precious commodity. They have to be nurtured and maintained.

The contribution of healthcare

In the knowledge economy, there really is a premium on good health. And on good health services. Even the Institute of Directors acknowledged just last month that:

“The efficient provision of healthcare services is of vital importance for business. Sickness is a major cost for business, and, if an employee goes long term sick, this can be very disruptive, especially for small businesses.”

Sickness is a hidden social tax on business, undermining competitiveness and reducing productivity. 47,000 working years for men alone are lost every year due to coronary heart disease, and the total lost to all disease is almost a quarter of a million years each year. That’s not just a health concern – it is an economic concern too. If you changed that sentence to “quarter of a million working years lost to industrial action last year” then business would be banging on Government’s door and demanding urgent action.

The CBI estimates that temporary sickness absence costs business over £10 billion each year. As the IOD noted, these disease-driven inefficiencies in the economy can have particularly acute effects on small and medium sized enterprises. Here smaller pools of employees mean that the temporary loss of indispensible skills can spell disaster.

And not just for the individual firm. There are wider implications for the economy as a whole. Ill health involves a major loss of productivity potential. It imposes costs on taxpayers and it has significant opportunity costs too. Ill health is a significant cause of unemployment and its attendant costs to the benefits bill. 15% of jobless people cite back pain alone as a reason for not working. It accounts for 119 million days of certified incapacity. It also consumes 12 million GP consultations and 800,000 in-patient days of hospital care. It costs the state almost £1/2 billion each year. These figures point to a clear relationship between ill health and labour market exclusion.

Figures released just last week by the Office for National Statistics suggest that 29% of adults in workless households said their health was not good, compared with eight per cent in homes where someone worked. The number of people who are long term sick and disabled wanting a job but not presently looking has doubled in just a decade to almost 750,000.

This level of ill-health causes a loss of productivity and a loss of potential skills that a human resource-led labour market can ill-afford. As we move towards the potential of full employment, that threat to growth becomes more real – there are already labour shortages in specific areas. This threat to growth and low inflation can be at least partly offset by growing the active labour supply. The feasibility of doing this is demonstrated by the fact that when this Government came to office, four and a half million adults lived in households where no-one was working, twice the rate of France and four times the rate of Germany.

Worse still, worklessness is now the principal cause of poverty in Britain today. And the well-versed argument that poverty – principally through peoples’ exclusion from the labour market – is a significant cause of ill health is only one part of the equation. It is true that poorer people are ill more often and die sooner. The other part of the equation, however, is that poor health contributes to poverty, not least because it excludes people from the labour market. Studies of the effect of chronic mental health problems have shown this relationship, and it exists for other conditions too. The route between poverty and ill health then, is not a one way street. It is a two way street.

Poverty finds expression in social division and in social exclusion. It is not just their victims who end up paying the price. We all do. The decent hard-working families who live in fear of crime. The loss we all feel from a declining sense of shared community. The taxpayers who pay the bills of social failure. This is one way that the cycle of ill-health and poverty imposes economic burdens.

There are other ways too. Poverty cascades down the generations. Up to a quarter of all children are persistently in low income families. Babies born to fathers in social class five are more likely to be low birth weight. Low birth weight is a key fact in a child’s subsequent development and opportunity. Poor children are less likely to get qualifications and to stay on at school. Poor health then is linked to low educational attainment, distorting our future competitiveness in the knowledge economy.

The vicious cycle of poverty, social exclusion, educational failure and ill health is mutually reinforcing. It needs to be broken. It can be broken. We know that good education is a route out of social exclusion and into prosperity. The time has come to recognise that health just like education is a route to economic fulfilment and personal fulfilment Just as good education is a route out of social exclusion and into economic prosperity so too is good health. By intervening in the poverty cycle, health services can effect what Giddens calls the “redistribution of possibilities”.

Modernised NHS for a modern economy

What, then, should be the response of the healthcare system? A modernised NHS can rise to these economic challenges by providing new interventions that actively help break the cycle of poverty and ill health, that are preventative as well as curative, and which are fast and convenient.

First then an NHS that works with others to help break the cycle of poverty and ill health as a contribution to expanding the productivity potential of the wider economy. In the first three years of the last decade if all men of working age had had the same death rates as those in the top two social classes there would have been 17,000 fewer deaths each year. Action here is long overdue. The White Paper Our Healthier Nation sets out an ambitious programme not only to improve the health of the nation but to close the health gap between the worst off and the better off. SureStart is one of the key delivery mechanisms – putting extra resources into health and education services in deprived communities, targeted at the first three years of a child’s life. Similar action involving local authorities, voluntary organisations and others to tackle teenage pregnancy, or drug misuse, are other examples of the approach.

But we also need to reverse the inverse care law that has dogged the NHS for fifty years – whereby those with the greatest health need get the least health care. You can see that in the way that those parts of the country that have the worst levels of heart disease often have the worst heart services. Two days ago I said I would break that cycle by targeting new cardiac services into those areas where they were most needed. Health Action Zones are another means to the same end.

Second an NHS that is preventative as well as curative. That means intervening earlier rather than later. Our modernisation programme will help transform the NHS into a springboard for better health, not just a fix-and-mend service when people fall ill. So, for example, this winter the NHS became the first country in the world to introduce the Meningitis C vaccine.

In our new blueprint for saving 20,000 heart disease lives a year we set out how improvements in heart surgery can make a real difference to survival rates. But the new smoking cessation services that we are providing for the first time on the NHS signal how it can stop just acting as a sickness service and start fully working as a health service. We are also expanding access to the most cost-effective treatments such as aspirin, beta-blockers and statins to help prevent the need for heart surgery in the first place.

But all of these preventive activities have to be grounded in knowledge of what works and what does not. That is not always the case at the moment. We cannot afford well intentioned but ineffective programmes. That is why I have tasked the NHS R&D programme to provide a better evidence base for health promotion. Public health activity needs to demonstrate cost-effectiveness just as do other forms of health intervention.

Even more fundamentally, the time has come to take public health out of the ghetto. For too long the overarching label ‘public health’ has served to bundle together functions and occupations in a way that actually marginalises them from the NHS and other health partners. Let me explain what I mean. ‘Public health’ understood as the epidemiological analysis of the patterns and causes of population health and ill-health gets confused with ‘public health’ understood as population-level health promotion, which in turn gets confused with ‘public health’ understood as public health professionals trained in medicine. So by a series of definitional sleights of hand the argument runs that the health of the population should be mainly improved by population-level health promotion and prevention, which in turn is best delivered – or at least overseen and managed – by medical consultants in public health.

The time has come to abandon this lazy thinking and occupational protectionism. To do that we need to distinguish these three meanings of public health. The National Service Frameworks provide a way to do so. Take the Coronary Heart Disease NSF published this week as the model. It starts with an evidence-based analysis of the patterns and causes of heart disease. It then attempts a dispassionate look using the available evidence at the relative contribution to tackling heart disease that can be made by primary prevention, secondary prevention, hospital treatment and care. It seeks to identify the optimal cost-effective mix between them, rather than privileging one level of intervention for its own sake. And then it allocates responsibilities between agencies and professions on an entirely pragmatic basis, not on the basis of historical demarcations.

In short, rather than define the NHS as healthcare delivery, and then assert that the NHS has very little do with health improvement, the time has come to reframe what we mean by the NHS and how it acts. The NHS has to encompass the full spectrum of intervention, and it has to get in to new ‘markets’ too – as a provider of information and lifestyle advice not just a provider of treatment and care.

Which is not to understate the importance of health care treatment. Because the third method by which NHS modernisation can contribute to improved health and economic success is by providing treatment services that are fast and convenient. I believe that the principles of the NHS are right but that its practices have to fundamentally change. People wait too long for treatment. Faster waits for cancer treatment, new fast track chest pain clinics and services that are recast to design delays out of the system are all important. And they are on the way. Last year the NHS treated about 5 million working age adults as in-patients. Around three quarters of these patients waited under six months, but a fifth waited for between six and twelve months; and about one-in-twenty waited more than a year. We need to do further work to model the proportion of conditions that kept people off work or out of the labour market, and the proportion of treatment that succeeded in getting people back to work. But it is clear that faster and more effective treatment services will get people back to work more quickly.

In these three ways – tackling health inequality, plus better prevention, plus faster intervention – the NHS is changing the way it works and what it does. In the process it is becoming better placed not only to meet the needs of individual patients but to meet the needs of the economy too. It is performing an economic function as well as a health function. It is good for patients and it is good for business.

The health of workers

Indeed I think that we need to look to see what more the NHS can do here. An obvious area of potential is the sphere known as occupational health. The growth of the knowledge-based economy and the premium on retaining skilled labour means that employers – whether in the public or private sector – will face higher opportunity costs from sickness absence. They will also have to find new ways of retaining and rewarding their staff. Pay of course will be a key determinant. But people’s career decisions are not simply crude financial calculations. Flexible working patterns will be important too, particularly for parents with young children. And so too will be facilities to maintain good health at work. As it is employees and their representatives are increasingly litigious about health and the workplace – so it is enlightened self-interest for employers to make sure that their own house is in order.

In the past “occupational health” has tended to have a heavy health and safety bent to it. The Health and Safety Commission will shortly publish proposals to modernise occupational health so that it is better suited to the needs of small and medium sized businesses.

The NHS has to make sure that its own house is in order on this issue. Healthcare is one of the biggest knowledge-based sectors of the economy, and we cannot afford to lose highly skilled staff. Quite the reverse. I want to expand the services that the NHS provides to make them faster and better for patients – and that relies on having more doctors, nurses and other health care professionals. Improving quality of working life in the health service is one of the factors that will help us expand staff so that we can expand services That is why I am examining how we can improve occupational health care services for our own employees whether in the primary, community or secondary care sectors.

There are some real beacons of good practice in the NHS. The Walsall Hospitals NHS Trust’s Occupational Health Department for example looks after 6,000 staff at the trust as well as its neighbouring NHS organisations. Managers get pre-employment checks and staff get health checks, advice on health and safety, health information, risk assessment, environmental health advice and stress management. But what is unusual here is that Walsall is also successfully marketing its services to both the public and private sectors, selling its occupational health services to the local university and to 12 small factories. It gets back enough money to break even. The Royal Berkshire and Battle Hospital NHS Trust generates £100,000 a year looking after employees in a number of small businesses and public sector bodies.

These two NHS organisations are making a tangible contribution to business. I am interested in exploring whether there is scope for the NHS more generally to provide similar occupational health services to employers. ‘NHSPlus’ if you like. A service of this sort might be particularly valuable for small and medium-sized firms which lack the size to organise in-house services but where ill health amongst key employees can have devastating consequences.

Back pain and stress management services will be of particular relevance, as shown by the 19 ‘Back in Work’ pilots that are now operating. Sandwell Healthcare NHS Trust, for example, is now working with small and medium sized businesses to provide early assessment and intervention for workplace back pain. Salisbury Healthcare NHS Trust is working with 300 local businesses in partnership with the local Chamber of Commerce.

And let’s be clear about two things. First – providing these new services will potentially be good for the NHS, not a burden. Intervening to prevent and avoid injuries and sickness will have downstream benefits for the NHS in avoided GP appointments, outpatient attendances and hospital treatment. And second – these new services hold out the prospect of net savings to employers, not extra costs. What’s more, as NHS waiting times come down for elective surgery, private employers will increasingly be able to free up the £1 billion-plus they currently spend on employee private health insurance, instead targeting that resource on more effective workforce health interventions of the sort that NHS Plus might provide.

There is then an intimate connection between good health, properly targeted health services and economic performance. So far my argument has focussed on three groups in the population. One – potential workers currently outside the labour market as a result of mutually reinforcing processes of social exclusion. Two – future workers, namely our children, for whom health and educational attainment are the routes to prosperity. And three, existing workers – and their employers – affected by sickness absence.

The health of older people

But there is a fourth group – retired people – that is ex-workers – whose health status also has an impact on economic performance. If we look at the country’s demographic profile there are significant implications for the economy in the next few decades. The number of older people has doubled since 1931. The overall upwards trend is set to continue to about 2030, when the population will stop growing as a result of past falls in birthrates. Increasing numbers of people will survive well beyond the age of 85.

We have to make the investment choices now about what those extra years of life are going to be like. If they are years of ill-health, disability and dependency that has clear economic consequences. It will mean not only that older people cannot contribute economically in their “third age”, but it means high costs for formal care, however it is financed. For those outside formal care, potentially productive labour will be taken out of the economy for informal care of dependent older people.

So investment now to prevent ill-health and to promote fast and effective treatment and rehabilitation may be as important economically as it is socially. There is evidence to suggest that increasing years of life can be relatively healthy, or of only mild-to-moderate disability. But the extent to which that is the case will depend on, amongst other things, on the availability of good health services including active rehabilitation.

The new aim of our care services here is to foster independence for elderly people just as it is to foster independence for working age people. We should no longer accept the so-called ‘dependency ratio’ (that is, the ratio of working age adults to others) as the principal prism through which we view these matters. Perhaps we need a new measure – perhaps we should call it the ‘independency ratio’ – to track the proportion of the post 65 population capable of active life and self care. Developing services to improve this measure is precisely what the Government intends to do. We are committed to a new set of intermediate care services specifically designed around the rehabilitation and recovery needs of elderly people. And for the reasons I have outlined, they will be beneficial both in human and in economic terms.

Conclusion

So to conclude – good health, good healthcare and good economic performance should no longer be seen as parallel universe. They are mutually reinforcing. You can’t have one without the other. It is time to look at the NHS in a new way.

No longer just as a consumer of resource. But instead as a generator of wealth. No longer just as a provider of treatment services. But instead as a promotor of good health. No longer working in isolation. But instead working alongside others to foster independence and create opportunity.

In short the NHS can make a major contribution to improving productivity and expanding the economy.

Below is the text of the speech made by Liam Fox, the then Shadow Health Secretary, to the 2000 Conservative Party Conference on 3 October 2000.

At our conference this week voters don’t need us to remind them that health has actually got worse under Labour.

They don’t need us to remind them that their tax has gone up with nothing to show for it.

They don’t need me to remind them about the increased number of people waiting to get treated, the jobs for Labour cronies, the repeated announcements, the PR stunts, sound-bites, photo opportunities, re-launches, postcode rationing, trolley waits, cancelled operations and the elderly ‘not for resuscitation’.

And all at the hands of a Prime Minister and Secretary of State who represent the most smug, arrogant, complacent, out of touch, ‘blame someone else’ and downright incompetent administration the NHS has ever known.

No, they don’t need to be reminded – so I won’t.

But disillusionment with Labour is not enough. What people rightly want to know is what we would do differently. We are the Government in waiting. It is our duty to outline our approach.

Let’s begin by dispensing with Labour’s great lies in leaflets like these. We will match Labour’s spending plans for health pound for pound. We believe in a comprehensive National Health Service funded from taxation free at the point of use.

When Alan Milburn was still peddling CND propaganda in his socialist bookshop, I was one of those overworked junior doctors in the NHS.

I spent all my working life before politics as a doctor in the NHS so when Tony Blair says that we intend to cut doctors and nurses, he is not only lying but he knows he is lying.

Unlike Labour’s NHS, ours will be one with proper priorities, where the sickest patients are treated first.

Where the value of our care is measured by more than just the numbers treated.

Where doctors decide which patients are treated, and not bureaucrats and where politicians stop interfering.

Where new partnerships are formed inside the NHS and between the public and private sectors.

It doesn’t matter to us where a patient is treated but when a patient is treated and the quality of that treatment.

Patients have a right to expect us to arrange the best treatment we can . If we can use the private sector to speed up the treatment of NHS patients then we should do so.

We should not be treated by the State like some Dickensian paupers having our gruel dispensed and expected to say thank you because it’s all there is. We are citizens and taxpayers in the world’s fourth biggest economy at the beginning of the 21st century. We have a right to expect something better.

But rights also imply responsibilities. Patients who make emergency night calls for trivial complaints, who use ambulances as a taxi service, or who fail to turn up for their hospital appointments are denying others potentially life saving services. And it can not continue.

REMOVING POLITICAL INTERFERENCE

Sometimes when I look at the NHS, I think that only a fool would believe that you can run a service that employs almost a million people from behind a Minister’s desk in London.

It is crazy to believe that one person can tackle the different and detailed health needs of Penzance, Preston and Peckham with a single ‘one size fits all’ solution dreamed up in Whitehall.

And it is unacceptable that a party political Secretary of State can decide who sits on every health authority and pack it with his own supporters. We will bring this disreputable and shameful practice to an end.

Actually, by letting the experts run the NHS I intend to be the least over worked Health Secretary in history.

SETTING THE RIGHT PRIORITIES

Next, we must change the targets we use. For too long, under Conservative as well as Labour Governments, we have been obsessed with targets based on input or throughput. In other words, you are doing a better job if you spend more money irrespective of how you spend it or if you treat more patients, irrespective of whether or not they are the right patients. That is not a sensible approach.

We need to have targets which are based on the outcomes for patients.

That means we need to raise our cure rates and survival rates to match those in neighbouring countries. It is not acceptable that if we develop lung cancer or breast cancer or colonic cancer or heart disease that our chances of survival are sometimes only half of the Dutch or Germans or Americans.

But meaningful targets need investment and not just slogans. That is why, although we will match Labour’s spending plans for health we will spend that money very differently. Our plans mean that investment will be directed towards priority areas beginning with cardiac and cancer services as a first step in delivering our Patients Guarantee. And we will abolish Labour’s iniquitous waiting list initiative which so distorts clinical priorities.

Am I the only one who believes it is unethical and immoral to deny lifesaving treatments in order to speed up more minor ones?

Am I the only one who finds it repulsive that patients have their cancer or cardiac surgery cancelled while surgeons are forced to carry out more hernia surgery so that ministers can claim better figures?

Am I the only one who believes that the sickest patients should be treated first?

It is time we had a system based on sound values, not sound bites.

Yet there are those who urge us to reject this approach. They say “Don’t do it. You may speed up cancer care and improve cardiac care but there are more people with ingrowing toenails, varicose veins and sebaceous cysts and they all have votes.”

Has our society really become that shallow?

Do we really believe that people really think of no one but themselves ?

I don’t believe so. Too many of us here today will have had family, friends or neighbours who have died prematurely as a result of the failure to prioritise our health care.

I believe that in the British people there is a sense of fairness and decency which is offended by this Government’s approach. We Conservatives must be their voice.

Politics is not about following focus groups but informing and leading public opinion.

It is time we got back to doing what is right not just what is popular in the short term.

THE BEST USE OF OUR STAFF AND RESOURCES

Of course, the NHS cannot only be about life threatening conditions and, in time, we want to see all waiting times reduced. That is why, as a first step, we support the idea of “stand alone” surgical units for procedures such as cataract surgery or hip replacements. These units, dedicated to a single type of treatment, could work more efficiently (perhaps even round the clock) enabling us to end the scandal of operations being cancelled at the last minute.

Under Labour the NHS is increasingly being run British Leyland in the 1970s where you don’t want to be sick after five o’clock or at weekends and heaven help you if it is a public holiday.

Indeed there is a general need to use our staff more efficiently. As a GP, I spent a lot of time doing things for which I was over-trained. We don’t need someone with nine years training to take blood pressures or blood samples. Doctors and nurses need to be used at the ceiling of their abilities.

For example in my own area of general practice I want to see GPs develop specialist skills to complement their generalist role. When a parent takes their child to the doctor with a problem it would be nice to see someone who had experience in paediatrics or if a woman goes with post menopausal bleeding she should be able to see someone who has trained in gynaecology.

Many of our GPs already work as clinical assistants in hospital out- patients clinics. It makes sense to develop a new level of care in general practice, with semi specialist GPs so that patients can be seen more quickly and locally and hospital outpatient clinics are used for those who genuinely require a Consultant level service.

In the same way, I believe nursing has come of age. In breaking down the territorial barriers we will offer nurses a real opportunity to make full use of their skills.

These developments will have impacts on training.

We need to recruit nurses from a wide spectrum and training must be flexible enough to accommodate a whole range of skills from simple patient care to further academic development.

We must never forget that holding the hand of someone who is afraid can be just as important as operating complex equipment.

And it is time that we all got back to recognising something we seem to have forgotten – that nursing and medicine are not just jobs but a vocation, and should be valued as such.

EXPANDING THE PRIVATE SECTOR

Despite the lies being perpetrated by the Labour leadership, we have repeatedly made it clear that we will match Labour’s planned health spending. It will be welcome and it will allow a vital expansion of our health care. But it will not be enough in itself.

If we want to see total spending on health care brought up to European levels we will need to see the private sector increased as well as the NHS. That means making private health care more attractive.

To be blunt, the private sector also needs a shake-up. Too many products for individual private health care are too expensive, inflexible, with too many exemptions and covering you for everything except anything you have ever had.

This is especially difficult for the elderly made worse by the Government’s removal of their tax relief on private health. This is a government that seems to have entirely abandoned the elderly.

Labour have also hit company schemes too adding yet another burden to the NHS.

We must not back away from the challenge to make private health care more attractive in addition to the extra NHS spending.

A bigger cake benefits everyone if a real partnership is introduced. In order to encourage company schemes we will abolish disincentives in the taxation system where and when we can afford to do so.

This will ensure that additional provision is available to as wide a range of our fellow citizens as possible.

Choice in healthcare should not just be for the well-off.

By improving choice within the NHS and making access to the private sector cheaper and easier we can bring our spending on health up to the levels of other western countries and close the real health gap.

Labour will oppose us, just as they opposed Conservative trade union reforms which gave individuals more power and just as they opposed Margaret Thatcher’s council house sales which gave so many a share in prosperity.

Our instincts were right then and they are right now. Labour support the state. We support people. A better NHS and an expanded private sector working in a real partnership can benefit all our people.

MATRON’S VALUES

But health is not just about structures and money. It is also about values. I want to see a return to what I would call ‘Matron’s Values’.

It seems ludicrous to me that ward sisters are not in control of cleaning wards and feeding patients.

When the ward sister says jump the response should be “How high?”, and not “I need to call my supervisor.”

We need to give those who have the responsibility for patient care the authority as well.

One of my elderly neighbours has just come out of hospital. She was very unwell and unable to eat as well as being extremely deaf. For dinner she was given some rock-hard battered fish. There was a time when someone would have said make this lady some scrambled eggs which she can eat. But no, half an hour later the offending fish was simply whisked away untouched.

I’m sure you all know similar examples. It is not about major policy initiatives. It is about seeing patients as people not illnesses with a nametag. Sometimes in health it’s the little things that matter most.

And another thing. I cannot bear this habit of calling people, especially elderly people by their first name when they don’t want it.

My grandmother was never called Sarah in her life, not even by my grandfather. (I won’t say what he called her). She was always known as Mrs. Young. When she became confused she didn’t know who this Sarah was. And it’s not good enough.

We must understand that we are dealing with individuals who have their own identities, sensitivities and pride which should be respected. The Cabinet may call one another Tony and Jack and Mo. Our patients have earned greater respect. Dignity is their irreducible core.

TELLING THE TRUTH

We have a great challenge ahead in the debate on health – to tell the truth.

There is no endless flow of money. We cannot do everything we would like as quickly as we would like. Medical science is expanding faster than our ability to fund it. In the real world choices must be made, priorities must be set. There has always been rationing and there always will be.

We must have the courage to say what we know to be true.

And yes that means if doctors from overseas are not properly qualified and do not have adequate communication skills, then we will say so, irrespective of the knee jerk reaction of the PC brigade and their media allies.

You know promising things you cannot deliver in politics is cynical and creates resentment.

But promising things you know you cannot deliver to the sick and vulnerable is wicked and cruel. That is the charge at Labour’s door.

We must show that we are not just a party of pounds, shillings and pence. We must show what sort of Britain we want to live in and how we will achieve it.

Our way will be different.

Where health care is run for the patients not the politicians.

Where decisions are made by doctors and nurses not bureaucrats.

Where heart bypasses are not given the same priority as in-growing toenails.

Where vocation is once again valued.

Where we treat patients with dignity as individuals, where we tell the truth and do what we believe is right in tune with our beliefs, our experience and our values.

Below is the text of the speech made by Theresa May to the 2000 Conservative Party Conference on 3 October 2000.

Thank you Chairman and I am delighted Ladies and Gentlemen to respond to this excellent debate on Education so very ably introduced by Marion Rix and John Harthman.

The quality of contributions we have heard this morning shows the importance this Party attaches to the education of all this country`s children.

Children have only one chance in their school education. If they are to develop their full potential, we must ensure they and their teachers have the freedom to be creative, the inspiration to achieve and the aspiration to be the best. That is our task and I am privileged to be part of it.

Joining me I have an excellent team. In the House of Commons, Tim Boswell, James Clappison, John Hayes and Geoffrey Clifton Brown; in the European Parliament Philip Bushill-Matthews and in the House of Lords, Emily Blatch, Doreen Miller and Joan Seccombe – “girl power” and haven`t they down a magnificent job in winning votes against the Government to defend grammar schools and keep Section 28.

And joining us on the platform is Cllr Peter Chalke Leader of Wiltshire and our spokesman on education at the LGA -and thank you Peter to you and your colleagues who help to keep our feet on practical ground.

Ladies and Gentlemen: We are ambitious for Britain.

We should be proud of the enormous wealth of talent that exists in this country.

Our young people have so much to offer and education is the key.

Sadly these talents are being squandered by a Labour Government that believes the bureaucrat knows best, that thinks inspiration lies on page 34 of a 100 page government circular, that aspires only to political correctness and that is ashamed of Britain our history and our culture.

What a wasted opportunity. The reality of education under Labour is that class sizes are rising, disruptive children are kept in class, teachers are leaving in droves, too much money is spent on red tape, and standards are stagnating,

Government policy has completely lost touch with the real world. One minister even wants to stop young children playing musical chairs!

Earlier this year the Government paid £4million to consultants to produce a 234 page report which reveals that to be effective a teacher must – wait for it – plan lessons well.

Over the past year the Department for Education and Employment has sent out one publication every hour a teacher is at work.

It`s not surprising that since Labour came to power nearly 100,000 teachers have left the profession. Earlier this year a head teacher in the North East was so disillusioned that he left to become a lorry driver. A primary teacher leaving her job to become a chauffeur saying “I was faced with masses of paperwork every day which was very time consuming and not what I became a teacher to do”.

And what of Labour`s broken promises?

David Blunkett promised that grammar schools were safe in Labour`s hands. Tell that to the parents and teachers of Ripon Grammar School and Ripon College who had to spend months working to save their schools in the face of Labour`s rigged grammar school ballots.

David Blunkett once told a Labour Party Conference “Watch my lips no selection by examination or interview”. Now he says that was a joke.

Children`s education is no joke Mr Blunkett. Ladies and Gentlemen watch my lips – the next Conservative Government will abolish the grammar school ballots.

David Blunkett promised grant maintained schools they had nothing to fear from Labour. Tell that to the headteachers worrying about yet more budget cuts- cuts that have averaged £150,000 per school.

David Blunkett promised head teachers they would get their budget direct. Two weeks ago he turned his back on them. Nothing will change and Labour town hall bosses will still be able to hold money back from our schools and children.

Why? – Because this Labour government is arrogant – they think they know what`s best

They`re out of touch – they just don`t know what is happening in the classrooms

And they don`t trust parents and teachers.

We do trust parents. That`s why we will increase parental choice and give parents the power to change schools where standards are failing. And we will give parents better information about the standards in their local schools by bringing in value-added tables, which better measure the quality of education at the school.

And we trust teachers. That`s why we will give them the freedom to get on with the job our dedicated teachers want to do – teaching children and raising standards – without constant form-filling and interfering red tape.

We have a new approach to raising standards in our schools. By making every school a Free School we will improve the quality of education and ensure that every child is receiving the education that is right for them.

Free Schools will enable Heads, teachers and governors to decide what is best for the children in each school. The bureaucrats in Whitehall don`t know what`s best; and in today`s fast-changing world the traditional model of local authority control of schools does not allow each school enough freedom to be creative to maximise children`s potential.

Free Schools will get their budget direct. It will be based on a national funding formula, which will take account of certain differing needs, but will start to reduce the current disparities in funding across council boundaries.

Too much money is held back from schools. Too much is wasted on bureaucracy. On this year`s figures our Free Schools policy would have meant on average an extra £540 for every child.

Free Schools will be able to keep their sixth forms – free from Labour`s threat of lower funding or closure.

Free Schools will be free to set admissions policy – and I`m confident that yes, there will be more grammar schools in future.

Free Schools mean a different role for central government. No more bureaucrats in Whitehall dedicated to drafting yet more circulars with which to bombard teachers and governors.

Free Schools also mean a different role for local councils – not running schools, but providing certain children`s services such as education welfare and statementing for special educational needs. Our thanks are due to all those who given so much over the years as councillors on LEAs. The future will be different. Our goal is to give children the best education possible and we must not be afraid to do what is necessary to achieve it.

Free Schools means a new role for governors who will be freed from much of today`s bureaucratic burdens, and who will have clearer responsibilities and powers.

Ofsted will be given the power to conduct spot inspections – seeing a school as it really is not after weeks of preparation.

One of Labour`s first acts was to abolish the Assisted Places Scheme depriving children from less well-off families of educational opportunities. Ladies and Gentlemen I can tell you today – the next Conservative Government will introduce a new Assisted Places Scheme.

The quality of education a child receives depends on the quality of their teachers. Our many hard working and committed teachers are fed up with a government that doesn`t trust them.

We want to set teachers free to get on with the job of teaching.

Teachers and parents also worry about discipline in the classroom. The disruptive few must not be allowed to damage the education of the many. The next Conservative Government will give Head teachers the power to expel disruptive pupils putting parents minds at rest that their child`s education will not be damaged by the disruptive few.

And there will be no appeal to the local authority – so the school can`t be forced to keep disruptive pupils in class by some politically correct Labour council.

The expelled pupils will not be forgotten as too many have been in the past. They will be given a full time education in Progress Centres away from the school site, but they will no longer be denying education to others.

But we need to do more to support teachers. Teachers are more vulnerable than any other group of professionals to false allegations of abuse from children. An NASUWT survey last year showed that over 80% of allegations made against teachers were false. Yet, the system seems to believe that an allegation is in itself proof of guilt. And teachers can find their names blazoned across the newspapers, their careers shattered – and all on the basis of a false accusation.

I heard last night of a teacher of 27 years who was falsely accused of abuse by a pupil. He lost his job, his role as a foster parent, and his role in the local scouts. His life ruined by a malicious accusation.

The next Conservative Government will give teachers anonymity in the media until the point where the police decide to press charges. The press will not be allowed to print their names or photos while the accusation is being investigated. Teachers lives should not be ruined by mischievous or malicious accusations.

We will do more to support those entering the profession. I have heard too many stories of teachers not being trained to teach children to read. Teacher training is too theoretical. Why on earth should someone training to be a teacher have to study “the politics of difference”?

The next Conservative Government will reform teacher training. Under the Conservatives trainee teachers will spend 80% of their time in schools and only 20% in college. More than three-quarters of a teacher`s training will be spent learning the skills and craft of teaching. Schools which are centres of excellence will be able to become training schools with funding and support to back that up. In future trainee teachers will learn how to teach in practice not just in theory.

Free Schools will raise standards in our schools. They will be free to be the good schools parents want with an enthusiasm for learning, a strong ethos and values.

But we need to support our FE Colleges and universities too. They need their freedom. FE Colleges will be given back freedoms Labour have taken away by changing their governing bodies and threatening them with Whitehall diktats on what courses they can offer.

And our universities need to be set free from government controls that mean they find it ever more difficult to compete on the world stage. Our young people deserve the best. With funding per student falling, Labour certain to introduce top-up fees, and universities finding it increasingly difficult to recruit and retain staff, standards in our universities are under threat as never before.

We owe it to our young people to stem the tide. That is why we will progressively endow universities. We will invest the proceeds from the sale of government assets like the radio spectrum in our universities setting them free of excessive bureaucratic control and interference and ensuring their academic freedom. Endowed universities would be free to recover their global pre-eminence and build a world role.

And they need to retain freedom over admissions. How arrogant of Gordon Brown to think he knows better than Oxford University who should be admitted to read medicine. And how irresponsible. In one speech he has done more to discourage state school pupils from aspiring to go to our leading universities than anyone else. The real problem is low expectations in state schools held back over years by Labour`s dogmatic insistence on levelling down standards.

We also want to help people into jobs. The Government`s New Deal is no deal for the 40,000 who`ve gone back onto benefit, the 60,000 who have failed to get a sustained unsubsidised job, or the 92,000 who left for an unknown destination. In fact far from finding jobs for 250,000 young people as Labour promised, the New Deal has only found jobs for 13,000.

We know that the best thing for someone who wants a job is to get into a job. That`s why we will replace the costly and ineffective New Deal with ‘Britain Works’. ‘Britain Works’ will give people the practical every day skills to get them into a job and help to keep them there.

Ladies and Gentlemen, for too long education in this country has been bedevilled by interference from the educational establishment. If we do nothing to stop this, our education system will grind to a standstill with falling standards betraying our children and damaging our county`s future.

Free Schools and Universities will enable us to develop the wealth of talents in this country to aspire to be the best.

There are those who say it won`t work, there are some who say it shouldn`t be done and there are those who say it can`t be done.

We know from Grant maintained schools that it will work.

For the sake of our young people to enable them to develop their talents to the full, it must be done.

With the will and determination and fired by an ambition for this country of quality education for all it can be done.

And Ladies and Gentlemen it will be done by the next Conservative Government.

Below is the text of the speech made by Iain Duncan Smith, the then Shadow Secretary of Defence, on 3 October 2000.

Last week the Prime Minister said he had reached his irreducible core. We may not know what his irreducible core is – only his focus groups can tell him that – but we do know that he has reached it. The question is what does he do now he has reached it. I always thought that once you had finished eating an apple you threw away the core.

Today’s debate is not about the Prime Minister’s core, but about what his Government has done to the Armed Forces and how we will rectify that.

We are proud of our Armed Forces. We only need to look at the rescue of the British Army hostages in Sierra Leone to see how good they are. We are proud of their outstanding success. Yet it was not without loss. I would like to pay tribute today to all those who took part, particularly Bombardier Brad Tinnion who gave his life fighting for his comrades and his country.

Yet behind the headlines, in the Gulf our RAF pilots are fired upon nearly every day by the Iraqis. And in Kosovo and Bosnia our forces patrol an uneasy peace with calm assurance. And last week the Navy came to the rescue of the victims of the Greek ferry disaster.

Still in Northern Ireland our troops stand in support of the brave men and women of the Royal Ulster Constabulary. Let me say that again, Royal Ulster Constabulary.

Peter Mandelson says that the name conjures up the wrong image. This should come as no surprise from someone who has called our own troops ‘chinless wonders’ But for me RUC stands for dedication, service and sacrifice.

In many other areas around the globe they are the unsung heroes. But the armed forces are leaving in droves. Do you blame them?

Exercises are cancelled, soldiers are being sent into action with guns that don’t work, whilst having to use mobile phones on the battlefield, upgraded bombers that can’t drop bombs and short of enough pilots to fly them anyway.

Fighter jets that won’t have guns, ships without missiles, sailors shouting ‘bang’ in gunnery training instead of firing live ammunition. And service families living in sub-standard accommodation for too long.

Conference, a few weeks ago, people couldn’t get fuel for their cars. Well at the end of last year Navy ships were unable to leave port because they couldn’t even afford the fuel.

The result is that the Armed Forces have 5,000 fewer servicemen and women than they did when we left office. That’s the equivalent of 10 Army battalions. Or 20 destroyer crews.

Last week the Prime Minister pompously talked about difficult choices. What he didn’t say was that because of cuts, the RAF has to choose either to scrap its Tornadoes or Jaguars.

This, ladies and gentlemen, is defence of the realm – Labour style.

Yet today Robin Cook struts his stuff on the world stage, only too happy to commit our overstretched forces everywhere and anywhere. The Armed Forces are the best in the world. But the truth is that behind the gloss, they are being really hurt – yet despite that they show dedication and professionalism in marked contrast to this Government. But whilst they squabble, new threats around the world are emerging.

We are seeing a dangerous and widespread proliferation of long-range missiles, biological, chemical and even nuclear weapons taking place amongst the rogue states of the world. Missiles are now capable of reaching from the Middle East right to the heart of Europe. It won’t be long before they are able to strike here.

The Americans are responding to this new threat, developing anti-missile systems to defeat this new danger. But instead of supporting our American allies, Mr Blair has run away from the problem and instead is playing games with his plans for a Euro Army.

The Blair Government has led the creation of a Euro Army to rival NATO, and the EU is busy creating what Mr Prodi has confirmed is a European Army of some 200,000 men. Blair’s short-sighted short-term use of Defence as a bargaining chip in the corridors of power in Brussels has risked all our security.

A Conservative Government will support the Americans in their development of defences against weapons of mass destruction. And we will put paid to any divisive and political notion of a Euro Army. We want to improve European defence capabilities – but within NATO, never outside it.

But even worse, Labour believes that the Armed Forces are a social experiment in human rights. But what they don’t understand is that being a member of the armed forces isn’t about rights. They give up many of their rights to defend ours. They are expected if necessary to kill or be killed – events just a few weeks ago in Sierra Leone are a stark reminder of this fact.

Yet by applying the European Convention on Human Rights to our forces this Government is putting their effectiveness into the hands of campaign junkies, jobbing lawyers and even judges. Theirs is a creeping tide of political correctness threatening to overwhelm our forces’ military effectiveness.

So when we return to Government we will take the Armed Forces out of this politically correct morass, safeguard their unique ethos, and uphold the primacy of military effectiveness.

Labour’s policy of asking the forces to do more with less has damaged all three services. Labour’s cut of 18,000 men from the Territorial Army was vindictive. Less than a year after the cut was made they were getting ready to call them up for service in Kosovo.

In Government, I promise we will return the Territorial Army to its full effectiveness and restore their important place in support of our regulars. The Army is overstretched and 8,000 men understrength. Full manning will be a priority for a Conservative Government.

We also appreciate and value the dedication and loyalty of service families. And they will be at the centre of our thinking and our policy making.

For us defence of the realm is the first consideration of any Government. Some people say defence doesn’t matter but sixty years ago what Churchill referred to as that brilliant youth risked all in the skies above in the defence of their country and the people they loved.

My father was one of those few. And he never ceased to tell me the reason so many of his friends died was because politicians had failed to heed the warnings and left us without strong defence. But then this Government doesn’t like history ……

It’s a Government which seems to hate the country it was elected to govern, which sets one part of the country against the other. That pours hundreds of millions of pounds into a shapeless piece of foreign plastic, which no one wanted, whilst insulting pensioners and service families.

But what we understand is that no country ever created a future by making war on its past.

At the election there will be a choice between spin and substance, between being embarrassed about our nation and being ambitious for our nation.

Confident and united at last behind William Hague, ours will not be a battle just for Government but for the heart and soul of the country that we love.

Below is the text of the speech made by David Heathcoat-Amory on 4 October 2000.

It is a great privilege to take over the Trade and Industry job from Angela Browning who has done so much to expose the myth that New Labour helps business, or even understands it.

And I’m very lucky to have a team like Alan Duncan, Nick Gibb and Richard Page, as well as Doreen Miller, Peta Buscombe and John Mackay in the Lords. Each of them on their own knows more about Trade and Industry than the entire Labour front bench put together.

One of the puzzles about the DTI is this: How is it that after all the privatisations, all the industries freed from state controls, all the competition we brought in, the DTI has gone on growing? After 3 years of a Labour government its running costs have increased by £114 million. This year alone it will take on an extra 500 civil servants.

So as the DTI’s responsibilities get smaller, the department gets bigger.

So don’t tell me that there aren’t savings to be made in public expenditure without hitting front line services like health and education.

Pledge number one: The drive for a smaller state starts here. The DTI will be reorganised to make it leaner, fitter, and smaller.

And instead of policies from New Labour we get gimmicks. Last year Stephen Byers announced that he had discovered ‘Rip off Britain’. The consumer he said was being ‘treated unfairly’. What he didn’t say was that it’s his government that’s doing the ripping off.

Who made our road fuel the most expensive in Europe? A body blow to the haulage industry and every manufacturing company in Britain. The Labour government did that. Petrol is now taxed more heavily than champagne. The champagne socialists are now the ones with a full tank of petrol.

And it’s not over yet. From next April every business in the country, from the smallest corner shop to the biggest multinational, will pay a new energy tax, the so-called Climate Change Levy, on all their gas and electricity bills.

So yes, Britain is being ripped off, by the Treasury with its stealth taxes. And you Stephen Byers have done absolutely nothing to stand up for either the consumer or British business. For that failure, Mr Byers, amongst so many others – it is time you went.

You’ve done nothing for small business either. Look at sub-post offices – small business which are being chopped off by this government and are now closing in record numbers. The only reaction from this government is to talk of setting up some Universal Bank, which is so universal it’s invisible. This destruction of the post office network will not be forgotten at election time.

It’s not just taxes. As any businessman will tell you, there’s the endless regulations, red tape, and government interference. And the inexhaustible stream of European Union directives.

The government deliberately added to this torrent of regulation by giving away, unilaterally, our hard-won opt out from the European Social Chapter. That was an act of political vandalism that’s costing British business an extra £10 billion in this Parliament.

Labour Ministers and MPs have no idea what it’s like to be on the receiving end of hostile taxes and regulations. I do, and I’m going to do something about it.

But let’s admit that we didn’t do enough when we were in government. We checked the regulatory juggernaut but we failed to reverse it. But now we’ve listened to businesses, particularly smaller ones who haven’t the time to serve on consultation committees in London but who end up bearing the costs.

We’ve listened and we’re going to act. We will independently calculate the total cost of regulations issued by each government department. And that total will have to come down year by year. William Hague has made clear that ministerial careers will depend on it. So we’ve all been warned.

The message is, we’re serious. It adds up to pledge number two: I will de-regulate before breakfast, before lunch and before tea. The DTI under us will be a department for deregulation.

One more point before we start our debate.

There are huge opportunities for this country from the electronic revolution, the internet and e-commerce. These technologies are outward looking, tariff-busting, distance-conquering, and they all use the English language. They are not just liberating technologies themselves; they also reinforce Britain’s position and history as a global trader.

Sometimes I’m accused of being a Little Englander because I’m against joining the euro. The truth is the exact opposite.

It’s the Labour party who are the Little Englanders, they are so defeatist about our nation that they will try and lock us into a continental system of high tariffs, high taxes, high regulations, and the euro.

We have a bolder vision: yes to free trade, no to the euro. British industry needs world markets, and a country which is confident, self-governing and free. That is our policy. That is exactly what we will deliver.

Below is the text of the speech made by Francis Maude on 4 October 2000.

Speakers today have all shown that they believe in Britain, they believe our country can be best in world. You all do; so do my team: Richard Spring and Cheryl Gillan in the Commons, who carve up the world between them. Stephen Day, our unsleeping Whip. Patricia Rawlings, who does terrific work in the Lords, and a special welcome, leading our Front Bench team in the Lords, to David Howell. It’s wonderful to have David back in the front line.

I’m a very lucky chap to have such an experienced and talented team. We’re all part of one team. William’s team. We’re ready to govern. And I tell you: we’re raring to go.

Ten years ago I served as one of Margaret Thatcher`s Foreign Office Ministers. Quite a year, that was: the Berlin Wall came down; the Cold War ended, and the shape of the world changed. I don`t want to take all the credit. But in the ten years since then the world has changed out of all recognition.

It’s actually less stable than it was; the Cold War lent a grim predictability to life. Ours is a swirling, tempestuous world; a world bursting with opportunity; a world of lightning information flows. Truly a network world.

People travel more; they know more about the world. Twenty or thirty years ago a trip round Europe was pretty exciting. Today it’s like a trip across town. Today young people in their gap years can span the world – and they do. And they want to make a difference in the world – themselves – they don’t think it’s all down to governments.

If we believe in ourselves, Britain can flourish in this new network world. Just look at the assets we have. The world’s fourth largest economy. The second biggest overseas investor. The greatest international financial centre. English, the language of the internet, and of global exchange. Armed Forces admired throughout the world. Membership of the EU. At the heart of NATO. The transatlantic relationship. At the centre of the Commonwealth – and our new Commonwealth Commission is mapping out a big new role for it in the network world.

In this new world, we aren’t on the edge of anything. Britain can be at the centre of it all. Our foreign policy must be for this new world. We have to look outwards, not inwards. And it shouldn’t be difficult. The British were globalists before the word was invented. We’re committed to global free trade by 2020. That’s the best hope for developing nations. Britain never has sought isolation. It never should. And under the Conservatives it never will.

So yes, Britain can be at the centre of the new network world. We will use that position to serve British interests. We’ll do so honourably and – yes – ethically.

Talking of ethics: did you hear Robin Cook last week, going on about ‘a miserable, shrivelled and shrunken thing’? Up and down the land, people were saying ‘there he goes, talking about himself again. For him, ethics might just as well be a county east of London. There’d be a big change, said Robin Cook. Britain’s foreign policy would have an ethical dimension. Who does this man think he is?

This country, that spread freedom, law and democracy across the globe. That twice last century fought for all Europe against tyranny. That most recently helped liberate millions of our fellow Europeans from the iron hand of Communism. Where was Robin Cook when we were fighting that battle? Posturing in his CND badge. While we never let up, he wanted Britain to slink, weaponless, from the world stage.

Foreign policy is about strength. Strength and honour. We`ll use Britain’s strength in the world. We’ll use it for peace and stability: whether in Kashmir, or Cyprus or the Middle East. We pray today that those caught up in conflagration in Gaza and the West Bank see that peace, not conflict, is the prize. We sincerely hope that the talks in Paris bring this violence to an end.

We’ll use our strength to promote democracy and the rule of law. The verdict of the ballot box must be respected. Mugabe and Milosevic: it’s over. You tried to rig it – and you failed. Give up – and get out.

And – yes – we`ll use British strength to promote the interests of Britain – and Britons.

For we believe in Britain. It isn’t obsolete. In the new network world, nations will matter more, not less. Globalisation means people need to be able to identify with their country more, not less.

Last week I was in the Caucasus. I was meeting people who only regained their nationhood eight years ago. They’re not about to give it up. Go to Kosovo, and talk to people, as I did: nationhood is their dream.

And it makes sense: in this fast-moving world, governments need to be flexible, and responsive. Countries, today more than ever, need the power to govern themselves.

And I just don’t understand why Tony Blair’s given up on it. He claims we either give up more and more powers. Or we condemn Britain to a lonely isolation. What a sad, outdated, defeatist view. Where’s the vision? Where’s the leadership? Where’s the conviction?

All round Europe, there is a really serious debate about its future. We agree with some bits, disagree with others, but it’s a real debate, with real convictions. There’s only one leader with nothing serious to say. Tony Blair. No leadership, no vision.

It’s different behind closed doors. He’d happily take Britain into a European superstate. He’d love to scrap the pound. But he wants to do it by stealth. It’s the Love That Dare Not Speak Its Name. He knows that most people, the mainstream majority, want no truck with it.

The mainstream majority want to be in Europe, not run by Europe. That’s why last year, against all expectations – perhaps even against our own – we won the European elections. The winners, under Edward’s leadership, have been hard at work. We work together – one team. In the last few days they’ve tabled the largest number of amendments to the European budget anyone can remember, aimed at cutting waste and eradicating Euro-propaganda.

There’s still a lot to sort out. The Commission needed a man of sharp intellect, decisive action and few words to put their house in order. They chose Neil Kinnock. Why do I think there’s still some distance to go?

Well. Here’s a pointer. The day I was in Brussels last month, Labour MEPs drove through a directive on…how to climb a ladder. That’s right – there really is an EU way to climb a ladder. It says this: ‘Ladders shall be so positioned as to ensure their stability during use.’ ‘Mobile ladders shall be immobilised before any person steps onto them.’ Well, thank you.

Then they agonised over whether to permit ‘The holding of a ladder by another person as a safety measure.’ And there let us leave them, these Labour MEPs: up their ladders; off their trolleys.

You really couldn’t make it up, could you? Tony Blair says we do make it up. He says it’s all fantasy. ‘No one I know wants some overblown United States of Europe’, he says.

Really? You know the German foreign minister, don’t you, Mr Blair? He wants ‘the transition … to … a European Federation.’ ‘We must put into place the last brick in the building of European integration, namely political integration’, he said.

You know Mr Prodi too, don’t you? Didn’t you appoint him? ‘Step by step … the European Commission … behaves like a growing government’, he says – and he means it, too – he approves of it.

And you must have met the French Prime Minister? He claims he’s met you, anyway. He talks of the EU crossing ‘a milestone towards the creation of a united political Europe’.

We may not like what they’re saying. But at least they’re honest. Why can’t Tony Blair tell the truth? Why can’t he be honest?

So let me be clear. If some others decide to integrate more, we won’t stand in their way. That’s their sovereign right. But a Conservative government will not – not – do the same.

And no, we won’t be ‘left behind’, or ‘isolated’; we’re not missing any boats. Two simple things came out of last Thursday’s Danish pasting. No more one size fits all. And nothing inevitable about scrapping the pound. People want to be in Europe but keep the pound. They know they can. And with a Conservative government, they will.

For the mainstream majority agrees with us. They’re not anti-European – and nor are we. If we weren’t committed to stay in Europe, why bother trying to change it? And the first change is that for Britain, integration has gone far enough. We will oppose any further loss of the British veto over EU laws. We will oppose the job-destroying Charter of Rights. And we will oppose the creation of an EU defence force outside NATO.

It’s so clear now that the public agree with us that I suspect Tony Blair may be getting a bit fussed. So don’t be deceived if he tries to water down the Nice Treaty this December. He hasn’t suddenly seen the light. He knows there’s another treaty in the pipeline. A treaty to create a European constitution for a European superstate. A treaty planned for – yes, after the next election. That’s why the stakes are so high: that’s why we’ve really just got to win.

Today I make two commitments. We will legislate so that further transfers of power can only take place after a referendum. Yes, Mr Blair: the people. Remember them?

And we are all fed up with seeing the European Court extending the EU into areas of national government well beyond those that Parliament intended to transfer. So we will legislate to create ‘reserved powers’. Beyond the powers we intended to transfer, EU law will not override the will of Parliament. Never again will the Treaties be extended by un-elected EU judges.

We’re not going to break our treaty obligations. There is no question of that. We honour Britain’s obligations. But why shouldn’t Britain enjoy the same constitutional protection as France, Germany and Italy already do? If it’s good enough for them, it should be good enough for us.

Next, we’ll insist on a flexibility clause; outside the single market and core areas, let countries be free to accept only those new Euro-laws which meet their needs.

And let’s be blunt: some Brussels policies just aren’t working. The aid programme. The Common Agricultural Policy. The Common Fisheries Policy. They all waste money – they’re failing relics. They don’t need to be run from the centre. More can, and more should, be run by the nation states.

It’s eleven years since that momentous November night when the Berlin Wall came tumbling down, and the Iron Curtain was shattered. The EU has a historic duty to embrace the whole family of European nations. It’s taking far too long. If we want enlargement – and we do – we need a flexible Europe, a network Europe. We not going to take lectures from those who were nowhere to be seen while the West won the Cold War and made enlargement possible.

Mr Chairman, Europe’s strength is the diversity of its nation states. It’s their very sense of nationhood. This is the basis for our vision of Europe, a flexible and enlarged European Union. It’s the vision for which Conservatives have long argued, under Margaret Thatcher and John Major and William Hague.

For us believing in Britain isn’t just a phrase. It’s what we’re about. Yes, we believe in this United Kingdom – we believe it really can be the best place in the world. Yes, we believe in Britain, because we believe in the British people. Today people know more; they want to do more – themselves – not just for themselves, or by themselves; but together, and for others.

For others not just here at home, but abroad too. You see, like us they don’t think it’s all down to Governments. They’re sceptical about politicians, even suspicious; they just don’t believe today that the answer is ever higher taxes and an ever bigger state.

They long for leaders who are honest with them, who respect their intelligence. They long for a party that is in tune with their hopes and fears, for themselves and for their country. They long for a Government that earns their respect by speaking the truth.

We are such a party and, under William Hague, we will be such a Government. And if we hold fast to our beliefs and fight for them with every sinew, we will not just win the chance to serve. We will be worthy of it.

Below is the text of the speech made by Michael Portillo, the then Shadow Chancellor of the Exchequer, to the Conservative Party Conference held on 3 October 2000.

Four years ago Tony Blair promised us a new Britain.

He promised taxes wouldn’t rise. But they have.

He promised shorter waiting lists. But they’re longer.

He promised smaller classes. But they’re larger.

He promised more police. But there are fewer.

He promised his government would be purer than pure. What a joke.

I feel so sorry for the many people who put their hopes in that man. They are so bitterly disappointed.

They were sold a dream and it’s just not there. And there hasn’t been a single word of apology.

Well, he did say the Dome hadn’t been a runaway success.

Not a runaway success? As I recall, that’s what people said to me after my defeat in Enfield Southgate.

It’s four years since I could address a party conference from the platform. A lot of water has flowed under the bridge. We’ve travelled a long distance since then: I have, you have, the party has.

I was devastated by my defeat at the time. It certainly didn’t feel like it at the time, but the British electorate did me a favour. My period out of parliament was a chance to connect with the Britain of today.

Now, as Shadow Chancellor, I cannot forget those experiences. My job is not just about dry economics. The quality of British life cannot be measured in material terms alone.

We are the party that understands how much the world has changed.

Our country would be stronger and its people more willing to take responsibility if we had fewer politicians passing fewer laws, raising fewer taxes and intruding less in our lives.

Young people reject the Labour Party’s bossiness, meddling, banning and regulating.

Britain has changed and the Conservatives have changed with it. For new generations of British people, old prejudices have been swept away.

The Conservative Party is a party for our times.

We are a party for people, not against people. We are for all Britons: black Britons, British Asians, white Britons. Britain is a country of rich diversity. That Britain was on display in Sydney. Athletes of every background united by a pride in Britain, and Britain united by its pride in them. Conservatives don’t look for uniformity, but for the qualities that mark people out as individual and exceptional.

We are for people whatever their sexual orientation. The Conservative Party isn’t merely a party of tolerance: it’s a party willing to accord every one of our citizens respect. Why should people respect us if we withhold respect from them?

We value people for what’s inside them.

We heard last week Labour’s smears against our policy on asylum seekers. That policy will re-establish public confidence in our controls. That frees us to give a warm welcome to those who come to Britain in fear of their lives.

That’s how my father came. Britain’s willingness to take in refugees defines us as a generous and responsible people. It’s a tradition that will be upheld by the Conservative Party.

We want people to aspire, to reach the heights to which their qualities can lift them.

While I was out of parliament I took a television camera into some housing estates. I saw a lot of poverty. But in a way what shocked me was not so much the absolute poverty – for many people had videos and their children wore Reebok trainers. What distressed me most was the poverty of expectation and ambition, the lack of hope for anything better in life to come.

But in a Saturday school organised by the black community in Sandwell, I found that aspiration: parents determined that their children should have a chance to fulfil their dreams. And education would be the ladder by which they’d climb.

Many Labour politicians climbed that ladder. But now they want to kick it away from others. For reasons of pure dogma, they destroy good schools: grant-maintained schools and grammar schools.

But they send their own children to exclusive schools. That’s Labour’s real policy on education. One rule for themselves, another rule for those they govern.

William Hague went to a state school. So did Theresa May. So did I. I had excellent teachers. We weren’t intimidated by public schools like Mr Blair’s. We thought we could do just as well as they did.

No state school should ever feel second class.

Every parent knows that a school is only as good as its head teacher. The Conservative way is to trust the head teachers and give them the money to spend as they choose. We will give them the opportunity to create great schools, to lift the sights of their pupils, and to transform their young lives.

This is our message to parents and teachers: we will set the schools free.

The next generation will want to be more independent in their retirement than pensioners are today. We will give them the chance to put their money into a properly-funded pension. We’ll enable future generations to accrue prosperity and share fully in the growth of our economy.

We won’t fudge welfare reform.

Gordon Brown promised pensioners change. They got it. Loose change. 75 pence. And when pensioners sent it back in disgust, Gordon cashed the cheques.

While I was enjoying my sabbatical, I worked for a few shifts as a hospital porter. I remember once wheeling a patient to the operating theatre on a trolley. He was motionless and I was awfully afraid he might be dead. But without warning, almost like Frankenstein’s monster he sat bolt upright and said, “What on earth are you doing here Mr Portillo?”

I was experiencing the sharp end of the NHS.

Everything was in short supply. There weren’t enough wheel chairs. So porters had to horde them. It reminded me of stories of the war, when there was rationing, but everyone mucked in and tried to be cheerful.

It was impressive. The doctors, nurses – and porters – are heroes. But things shouldn’t have to be like that.

Britain spends too little on health.

There’s a consensus amongst the parties that we should spend much more money on the NHS. But not on how to spend it, nor on how that money can be supplemented.

Labour impose politically motivated targets on our doctors and nurses. No wonder they’re demoralised. We would give doctors responsibility, and trust them to spend the money wisely, treating the sickest patients first.

Where Labour’s horizons end, ours begin.

Our neighbours in Europe know that you cannot rely on taxes alone to finance health. They would think it silly that families in Britain are encouraged to spend money on their home, on their continued education and on their retirement, but are discouraged through dogma from spending their own money on their health. So other countries have schemes, for instance organised by trade unions and employers. We’ll want to encourage that in Britain too.

Well spend much more money on the Health Service. And attract extra money too.

Labour are stuck in ancient ideology. As Ann Widdecombe once said, Labour have built a Berlin Wall between the public and private sectors.

We will tear down that wall.

Liberal Democrats have a policy for health and education too. It’s is to make doctors and teachers pay more tax. It’s not much of a gift for the NHS. But it’s a great gift for every Conservative candidate fighting a Liberal Democrat. Let’s hear a round of applause for my old pal Charles Kennedy, the Tory candidate’s friend.

While I was out of Parliament, I became a small business. The Inland Revenue and Customs and Excise sent me a pile of forms and books and tables that thick. I found it daunting and time-wasting. What a pity Gordon Brown doesn’t live in the real world where business people live.

We never forget that governments don’t create prosperity. Businesses do.

Tomorrow David Heathcoat Amory will tell you about our plans to cut red tape. We will make VAT simpler and fairer. Let’s stop punishing the people who create the jobs.

All Labour Chancellors regulate more. All Labour Chancellors tax more. But Gordon Brown is no socialist hero. He hasn’t taxed the rich to give to the poor. He’s cynically chosen soft targets for his stealth taxes: hard-working families, people he thought who would never protest.

Labour think high taxes give them the moral high ground. They talk of social justice. They believe that money that government spends is always more worthwhile than money that people spend for themselves on their families.

But I don’t.

I believe in allowing hardworking families to keep more of the money they have earned. I believe in allowing them to keep more of their dignity and responsibility.

Recently, a man wrote to me, a member of the seamen’s union. The union’s told him Gordon Brown’s taxed the pension fund and he must pay out another £200 a year if he’s not to be worse off in his retirement.

Is that social justice?

Another man told me he’s just retiring. Gordon Brown’s abolished the married couple’s allowance and age allowance. The man will have to pay £500 a year more in tax than his brother who retired last year.

Is that social justice?

In Suffolk last week a mother of four children, a beautician, told me she’s been driven out of business by Gordon Brown. She can’t afford to fill her tank with the most expensive petrol in Europe.

Call that social justice, Mr Brown?

There is no social justice in high taxation.

The Prime Minister devoted a large part of his Brighton speech to smearing the Conservatives. People long ago stopped believing Mr Blair when he spins his own policies let alone when he falsifies ours. People found his speech not only unbelievable but also disillusioning. Wasn’t he meant to bring a new honesty to politics? Why can’t he behave like a Prime Minister?

Before the election Labour claimed it was no longer addicted to high public spending, that the amount we spend is less important than how well we spend it. They committed themselves to stick to Conservative spending plans, because they knew that our prudence was a foundation of economic stability.

But as the events of the last few weeks have shown, this is not a Chancellor whose word is his bond.

Our economy has been growing since 1992. That gives us an opportunity to increase public spending. I plan to spend more on public services in every year than Labour has spent in any year. But I don’t intend to spend money the country hasn’t earned. I will leave room for tax cuts.

Labour taxes more and delivers less, and plans higher taxes year after year. Conservatives will tax less, spend better and deliver more. That will be the choice at the next election.

We will cut taxes on business, so that they can compete and create prosperity and jobs.

We will reform Labour’s taxes on entrepreneurs and on inward investment.

We will encourage savings, to give people security and self-esteem.

We will help pensioners and hard-working families.

We will restore a married couple’s allowance.

We will cut the duty on fuel.

That gives you a flavour of my budgets!

We will keep an independent Bank of England. We will make it more independent of government and more accountable to Parliament.

We will establish a National Accounts Commission to show the world that under the Conservatives there will be no fiddled figures.

And we will have an independent committee of economists to give public advice to me on the proper level of surplus or deficit.

These measures will ensure honesty, transparency and prudence.

They will ensure stable economic policies. They will protect the value of the pound in your pocket.

And when I say the pound I mean the pound. For our economic policy will be based on Britain having its own currency and setting its own interest rates.

Gordon Brown wants to be the next Chancellor of the Exchequer and he can’t tell you whether he wants to control his own currency or not.

Labour like to call us little Englanders. Is it likely a little Englander would be called Portillo? I am half Spanish, and proud of it. I am a true European, someone with a love of Europe’s different cultures.

As the Spanish proverb goes: Antes de que te cases, mira lo que haces. Before you get yourself hitched, watch what you’re doing. Look before you leap.

The euro plan fails to respect Europe’s differences. It shoe horns all the economies of Europe, with their different qualities and cycles and stages of development, into just one currency, and just one interest rate.

It threatens to take Europe back to boom and bust. The Irish now have high inflation. But there’s nothing they can do about it. When Ireland joined the euro it gave up the right to set its own interest rates.

In Germany the economy seems to be faltering. For Germany the single European interest rate is too high.

Not surprisingly, one interest rate for all of Europe is wrong for most places most of the time.

And here’s the rub. Supposing the people of Ireland want to vote against the policies that are driving up their prices? They can’t do it. Their elected government doesn’t make the policy. The critical political decisions about growth and jobs in Ireland are being taken by the European Central Bank.

And who votes for the European Central Bank? No one. It’s wholly unaccountable.

The most precious thing in Europe is democracy. Mr Blair hoped to bamboozle Britain into joining the euro. He hoped to scare us like children with tales of how frightening it would be to be left out. Denmark has shown that people cannot be fooled or bullied by arrogant politicians.

Mr Blair please take note.

At the election we will oppose the euro. British public opinion is suspicious of the euro as an unproven piece of political dogma. That is our view. That is the view of the moderate majority. We want to keep the pound.

And remember this. The euro is a bright idea recommended by the people who brought us the Dome!

Labour is leading Britain in the wrong direction. Compared with the United States we are under-performing. Labour is weighing us down with regulations and taxes. It’s making us uncompetitive. It’ll throw away our national goal of full employment.

Last week Tony Blair talked about Britain in his usual cool Britannia terms. In reality Labour lack confidence in Britain and seem ashamed of it. They are defeatist, thinking there’s no future for us unless we are more and more absorbed into Europe, less and less able to make choices for ourselves.

It’s amazing that the government of the world’s fourth largest economy should have given up the game.

Conservatives recognise the need for Britain to be globally competitive and produce global companies. If we commit ourselves to maintain control of our own currency and taxes, to be agile and open to change, to cut regulation and make our taxes competitive with the world, we can make Britain the outstanding enterprise centre in Europe.

We have a vision that fits our times.

William Hague has led this party out of dark days. I have never seen anyone face difficulty with such composure. He has real courage. The courage Britain needs in its next Prime Minister.

The quality of British life cannot be measured in material terms alone. I will not forget the experiences I had while out of parliament.

We will be the party of tax cuts, and welfare reform. Of social justice and full employment.

We will use the months ahead to be ready for government, to win the trust of the people that Labour has betrayed.

We are a party that believes in Britain, a party for all our people, a party that offers them aspiration and hope.

Below is the text of the speech made by William Hague, the then Leader of the Opposition, on 16 March 2000.

Today’s seminar could not be better timed. Next week, a special European Council will be addressing the crucial need for the European Union to take up the challenge presented by the knowledge economy. The European Parliament is just starting its second reading of the Electronic Commerce Directive, which will provide the platform for barrier free electronic trading across the EU. This morning, I will give an overview of E-commerce development in Europe, and the challenges now facing policymakers. I will also tell you about the Conservative approach to boosting E-Commerce activity at a European level, complementing the actions of our Westminster team. The Conservatives are playing a leading policy making role within our Centre Right Group (EPP/ED) in the Parliament, in making sure that our Open Market agenda is delivered successfully.

E-commerce going to be of great importance to Europe’s global competitiveness. Big progress has been made towards a true Internal Market – in market opening, in uniform product standards, in eliminating trading barriers. We have an excellent climate in which to encourage cross border e-commerce activities. E-commerce offers a huge opportunity to finally complete the internal market, by allowing market forces to operate in levelling market barriers, exposing high tax, high cost economies and making protectionist practises (such as unnecessary advertising restrictions) completely transparent.

Given its importance, it is a concern that Europe lags significantly behind the U.S.A. in the development of electronic commerce. Within the EU there are very significant variations in E-Commerce activity – with the Nordic countries, and Benelux being the leaders in PC use per household. In translating this into Internet activity, the Nordic countries lead is even more pronounced. Recent studies suggest that Spain and Ireland are among the leaders in their economic and business climate for e-commerce. There appears to be no in-built factor within Europe stopping the growth of e-commerce – which suggests that, as in the U.S.A, we should not flirt with market intervention, but allow market forces to work.

Companies operating in e-commerce would like the security of a legal framework within their activities can develop. Since 1997, the Commission has been moving ahead with framework directives in crucial areas such as electronic signatures and copyright. The Commission has followed the right approach – ensuring market openness by preventing member states from blocking cross border transactions. At the same time, business participation will be encouraged – especially smaller companies. Consumer protection will generate trust and confidence. There will be special provisions for internet service providers. The legislation is ‘technology neutral’ – thus being flexible enough to encompass future developments in a fast moving market place. It also requires member states to encourage self-regulation for consumer protection and redress – the right approach given the immense change ahead in retailing and consumer services.

The e-commerce Directive, which embraces all these provisions, has now been agreed by the Member States and is just starting its Second reading in the European Parliament. We intend to push forward quickly, with minimum changes, to secure approval by mid 2000. This will send out a strong signal that the Conservatives wish to encourage e-commerce and are prepared to move quickly to help end uncertainty for consumers and investors.

But there is much more to be done if Europe is really going to take advantage of the knowledge economy. Europe needs the economic infrastructure to encourage entrepreneurs to exploit the power of e-commerce. It needs the communications infrastructure to deliver widespread, low cost access to the Internet for businesses and private consumers. It needs a new approach by public authorities to the use of electronic information. It needs the right training and skills base on which new industries can be developed.

The Commission has produced an e-Europe strategy that claims to address these issues, but this document is a rather unfocussed collection of undeveloped promises. In reality, the major area that the European Governments must address is the tax and business climate to stimulate new, internet based businesses. We are promised yet another new ‘initiative’ for the Lisbon summit. A very welcome impact of e-commerce is that it is forcing Governments to address the well-known problems of the European labour market and the reasons why its job creation has been so poor:-

We shall push strongly for these issues to be properly addressed, and will press our own ideas for encouraging e-business start-ups. For example, we should encourage e-businesses to register their companies, and take on employees, in any EU country that offers the most advantageous conditions. A market driven approach would soon have governments competing with each other in encouraging e-business. This could be stimulated by a start-up scoreboard giving fledgling entrepreneurs all the facts needed to make their decision.

The new companies will need access to capital. There appears to be no proven need for market intervention at this stage, as there appears to be more capital available than good ideas on offer. The development of the Single European Market for financial services will bring about more dynamism and competition in the capital market. Unlike the Commission, which is toying with the idea of publicly backed funding, we see only a limited role for central intervention.

We would also like to develop a tax incentive framework that would encourage large companies to spin off e-commerce start ups, using their existing human and financial resources. There are many middle managers who would leap at the chance of developing a new business idea, and becoming their own boss. Spin off companies, with the risks being underwritten by the strength of their parent, would have the chance to grow quickly. They would also encourage the development of entrepreneurial skills and practical knowledge within their feeder company and help its competitiveness in the new information driven economy.

Governments also have a key role in market development as purchasers of e-commerce services. They should be encouraging ‘best practice’ and ensuring that their procurement systems are open to smaller, innovative companies.

Although open markets will be the prime enabler of e-commerce, the existing European grant instruments – regional and social funds – can be targeted to help e-commerce ventures. In both rural and urban communities, e-commerce will provide powerful tools to tackle unemployment – by encouraging new business ideas, by giving fast and cheap access to market information, by developing networks of entrepreneurs and job seekers. In many cases, e-commerce will help to reinvent old business models and transform large, slow moving industries. People with existing skills can be encouraged to develop niche products for targeted customers and market them globally.

The other key element to address is infrastructure. Low cost, widely available, broad band electronic communications will be an essential foundation for a powerful e-economy. The European Commission has published a bold plan for a single, open, electronic communications market, integrating fixed-line services, cable, digital television, and mobile. This structure, to be in place by mid 2000, would offer service providers open licensing and market entry opportunities across the EU. A key aspect of the proposals would be access to the local loop in every market, opening competition for services to every connected household.

The EU is already significantly ahead of the US in mobile telephones. 3rd generation mobile technology will bring internet access to consumers at a much lower capital cost than a fixed computer based (or TV based) system.

EU governments must encourage fast mobile internet growth by facilitating common standards and rules. They should be re-investing license fees or auction proceeds in repositioning public service operations in the radio spectrum and encouraging fast infrastructure investment and wide spectrum availability. Competition rules must allow global players to develop across one, barrier free, European market. The speedy growth of internet mobiles will also encourage new providers of simple, fast, useful data for phone users – based on travel, news, business and general information services, integrated with other services such as geographical data. These are areas where new European companies can gain a global lead.

In thinking about the developing market, we must also be considering the implications for society as a whole of the widespread availability of information technology. Education must increasingly equip young people to be active on-line consumers and to develop the skills to work in the new information companies. Retraining and reskilling will be needed in existing organizations in public and private sectors. The information society offers big benefits for the less fortunate and the less mobile – disabled people, and the elderly, for example. There will be very significant security and privacy issues to be addressed. The European Commission, and member governments, are now working on many ideas to help the spread of information society benefits – and some of them would be worthy candidates for reinvestment of licence fees, as they would further stimulate adoption of e-services. But the priority, at this stage, must be to drive forward market adoption of the new technology.

I have summarised the key aspects of the European scene for electronic commerce. The Conservative team in the European Parliament has taken a special interest in this area, and has raised the political profile of the issue across the Parliament. There is a big policy agenda to work through. Following the Electronic Signatures and E-commerce directives, there will be the Copyright Directive, the Distance Selling Directive and the Directive setting up a Single Financial Services Market, including Internet selling. We will be heavily involved in Electronic Communications liberalisation, both in the strategy and detailed legislation. The stimulus to Business start-ups will also be a focus of attention. Industry practitioners are invited to keep closely in touch with us to ensure that we have your views.

You have seen today a united Conservative approach, in Europe and Westminster, focused on meeting and mastering a key challenge for all of us. We firmly believe that a market-based, light-touch approach will be the way forward. E-Commerce represents a huge opportunity to enhance the power of markets to provide real benefits for customers across, to stimulate business activity and economic growth. The Conservative team will work together quickly and effectively to make sure that this opportunity is fully realised.

Below is the text of the speech made by William Hague, the then Leader of the Opposition, on 16 March 2000.

I am delighted to welcome you here today for the Conservative Party’s e-business conference. Many thanks to freecom.net for sponsoring this event; and to all of today’s speakers for giving their time to discuss the knowledge economy with all of us here today.

It is the measure of how important e-business has become as an issue, that a political party is holding this kind of event – and, that so many of you are here to take part in it.

Electronic commerce and its value to business has become one of the most important parts of the economic equation. You have been aware of this for some time, but it is now dawning on governments, the media and consumers that here is something that is changing the rules.

It has the power to transform the way we live and it will become ever more central to our future success as a country. If we take the sensible route, the route that I will map out today, then e-commerce can do for this country in this century, what the railways did in the nineteenth century and the automobile in the twentieth century.

It is vital therefore, that Government provides the right environment to nurture and support the talented business people who can lead us in this new economy and help to make Britain a leading player.

When we left office three years ago the Conservative Government had already delivered the foundations for the E-revolution, and you in your businesses had already started to build on those foundations. There was draft legislation in place to enable e-commerce to flourish, bring our laws up to date and to further deregulate the communications industry. But that was three years ago – and the world of the internet, like the world of politics, has changed a great deal since then.

Building on the knowledge economy that is springing up at such a fantastic rate will have huge implications for you in business – and for us in Government. I intend to touch on both of these areas this morning.

Success in e-business will of course rely on many of the policies that we have long championed.

So today I want to outline to you why low taxes are essential if Britain is to become a leader in the new economy.

I want to talk to you about our Tax Guarantee and a war on over-regulation that will widen our competitive advantage in the age of e-business and trade without frontiers.

I want to talk to you about the importance of nations competing with each other to be an attractive place for e-business, rather than driving that business away with higher taxes, more regulation and ever more centralised political systems.

I believe there are two very clear choices before us.

The first is to act in the belief that in a big jungle only big beasts survive; that as markets grow, so must the size of government. We can see this belief driving the way a number of Western European Governments behave, including our own.

They are interfering more and more in the labour market, imposing statutory working hours, levy new taxes and enforcing new regulations in a mistaken belief that this will protect small citizens from the chill winds of the new economy. I say such an approach does not protect citizens. It puts them on the dole. Higher taxes and more regulations only serve to make it that much harder for any business, dot.com or more traditional, to be successful in the global market. Which is why my Party is particularly concerned that business in Britain is having to find £10 billion a year to meet the costs of new regulations and £30 billion of extra business taxes over the lifetime of this Parliament.

I take a different approach, and I suspect many of you do as well.
I believe Governments must recognise that this is the age of the small unit, the individual on the internet, the small business and large business alike using e-commerce, and that in this age it is the low tax, low regulation nation state is best placed to succeed.

For in the dimension-less, go-anywhere world of the new economy, no country can take industry for granted – for industry can go to any country. The common sense approach would be to build on Britain’s existing advantages of the English language, our excellent software skills, and our entrepreneurial spirit by keeping government interference to a minimum.

That is the way to command the electronic frontier. That is what the Conservative approach will be.

We know this works. Take the example of Florida, which I visited a few weeks ago. There Governor Jeb Bush is attracting high technology companies to the state by creating what he calls Silicon Beach. He is doing it by building a low tax, low regulation, high skill economy.

Already Florida has seen a wide array of companies begin to cluster in Miami. These are companies offering services such as chat-rooms and search engines – email and e-commerce opportunities – as well as sites in Spanish and Portuguese specifically designed for Latin American and U.S. Hispanic audiences.

Britain is competing against places like Silicon Beach – and we cannot even offer the sunshine.

So the danger is that as all this develops, we fall behind. We already lag behind the US and much of mainland Europe in terms of Internet access; and American sites today dominate the competitive landscape – just three of the top ten most visited sites in Britain are UK based.

We also face higher costs and slower access to high speed services in Britain. As wireless and fixed communications are increasingly overlapping, it is absurd to have a regulatory structure that does not keep up with this technology.

Educationally too, there is work to do. We need flexible learners who can cope with constant change, always hungry for new knowledge and ready to lead in the knowledge economy.

A shift in skills is required right across the UK economy. Just look at recent employment headlines:

‘Tesco on-line business to create a further 7,000 jobs’ and;

‘Abbey National Internet Bank to create 500 new jobs’ are just two examples, while companies, such as Barclays Bank, cutting jobs in low skilled areas and creating them in what they term ‘knowledge areas’.

While access to Information Technology in our schools and universities grows there is still too little evidence that IT is being used to enhance the learning process rather than IT just being an “add on”.

We must also be sure that we don’t miss an important opportunity. The global reach of the Internet will drive students to look abroad for higher education qualifications. The UK is in a strong position to capitalise on this as UK qualifications are internationally well regarded. We must do so.

If these problems are not tackled we lose out. We do not have the luxury of time. The scale and speed of the new global economy is staggering.

Our sponsors today, freecom.net, state that the forecast for growth in the worldwide e-Commerce market has gone from £61 billion in 1999 to £0.7 trillion by 2003 – a phenomenal growth of 1,119% in four years.

What then should be involved in a light touch approach? What can we do to build on the knowledge economy?

You, of course, are in the driving seat. The new economy will create some big winners in business, and perhaps some big losers too in the years ahead. Like all of you, I watched with some amazement as new high-flying technology stocks ousted some of the ‘old economy’ giants from the FTSE 100 index.

Shares in the hi-tech and dot com companies are soaring, mostly based on future profits – such is the expectation for the future of e-business.

The challenge for professional investors is immense. We have to welcome the willingness of investors to bring their capital to help the growth of these companies, but they now have to develop their businesses in a way to deliver profits.

But the knowledge economy is not just about new dot-coms. It is about all businesses, old as well as new.

The Internet is reorganising the whole distribution process and taking out costs from the supply chain. It is lowering the cost of procurement, shortening delivery cycles and improving productivity.

Businesses that belong to the ‘old economy’ can use the new one to breathe new life into their operations, providing they do not make the mistake of assuming the Internet nothing more than an on-line version of a company or organisation.

Everything that I have said about the potential of e-commerce assumes of course, one thing – actually being connected to the Internet.

Whether it is business-to-business, or business-to-consumer, e-business is no business unless we’re connected. For the past few weeks the television news has been full of ‘the great Internet race’.

However it is important not to ignore the fact that the essence of e-commerce is that telecoms and service providers are interconnected. At one level you have the providers of the net, which is the backbone of the Internet, carrying the traffic. At the next level down, there are providers – the ISPs.

Currently, the Government and the media are talking about reducing the costs of access between the ISPs and the consumers. This is very welcome but it s is only one level.

There seems to be much less debate about the telecom providers, and the control that they wield over the Internet backbone. We must encourage openness and competition at every level of the Internet; over excessive dominance or control at any level would be detrimental to the system as a whole.

At present 70% of all Internet access travels via the USA and is re-routed back to Europe. Too much control at the backbone, or ISP level could only serve to push this figure up further.

If the providers of the Net take ‘ownership’ of the Internet, there is the potential of increased Internet costs, regardless of what the ISPs want to do. As one, or a few big, companies in effect start to own large parts of the Internet; the omens for healthy competition are not good.

Nor does it help that for each method of delivery of internet by telephone wire, satellite, radio-waves, cable, digital broadcasting and analogue broadcasting there is a different set of regulators trying to enforce different sets of regulations. Which is why, as I say, if we are to have regulation, then it must keep pace with technological change.

The internet revolution poses challenges for all your businesses. It also poses challenges for politicians too.

It is not enough for us to stand up at these events and proclaim the obvious about how e-commerce is ‘dissolving physical barriers, and levelling the business playing field’. Politicians of all parties must avoid the temptation to take credit for what is already happening.

I start from the position of someone who is profoundly sceptical about the extent to which the new global economy should be, or indeed can effectively be, regulated or taxed. This new economy has arisen in an astonishingly democratic fashion. And it has done so through the actions and ingenuity of countless individuals in what has probably been the most open and least regulated market in history.

Therefore, the right policy is for Government to stay out of the way and let it flourish. I have to say that this is not the approach currently being adopted by this Government

Take tax. Next Tuesday is Budget Day – a day on which some people think I earn half my salary since I have to give an immediate and detailed response to the Chancellor’s speech with no forewarning of what he is going to say.

But this year I know one thing for certain. Whatever Gordon Brown says, taxes, including taxes on business, will be higher when the Chancellor sits down than on the day he walked into the Treasury.

Even Downing Street now conceded that Britain’s tax burden has risen under this Government. Nearly £500 million of it will come in the form of the IR 35 stealth tax. Its name shows just how stealthy it is – it was sneaked out in Inland Revenue Press Release number 35 on Budget Day last year.

IR35 is a tax on contractors. Small IT companies are deeply worried about this new tax regime, which is forcing them to consider setting up shop away from the United Kingdom. The outgoing Chairman of the Professional Contractors’ Group said that he fears IR35 will deal a massive blow to Britain’s enterprise culture. “American multinationals will be laughing all the way to the bank as the British Government destroys their home-grown competition”, was how he put it. IR35 could cause a brain drain not seen here since the 1970s. It is exactly the wrong approach to the new economy.

This Government’s stealth tax increases also threaten the share option schemes that many high-tech companies need to attract highly skilled workers. Changes introduced by this Government which impose national insurance charges on employers offering share options badly undermines one of the best ways for dot.com companies to retain and motivate their workforce.

Far from driving away the very people whose enterprise and innovation can build and drive the knowledge economy, we should be doing everything in our power to make them want to stay.

Central to the our Common Sense Revolution is the promise that at the end of the next Conservative Government the state will take a smaller share of the nation’s income than at the beginning. In other words, we will cut the overall burden of tax on individuals and businesses.

For while our tax burden as a proportion of GDP is now 8 per cent lower than the Italians and 13 per cent lower than the French, it is also 5 per cent higher than the Japanese, 9 per cent higher than the Americans and a full 14 per cent higher than the Koreans. If we are to prosper in the new economy, that must change.

There is scope for tax reform too. For instance we must simplify our Capital Gains Tax. It is absurd that the reforms of the past few years have resulted in a more complicated, more distorting CGT system. Capital Gains Tax is now more difficult to collect than ever before. The British Venture Capital Association are right to favour a much simpler system and we are looking closely at how that might be achieved.

Alongside lower, simpler tax we should ensure the minimum of government interference and regulation imposed by Acts of Parliament.

Of course, some legislation in this area is needed. The Electronic Communications Bill will put into law the use of electronic signatures for the benefit of e-commerce, and we welcome that. But we had deep concerns about proposals included in that Bill, which could have imposed draconian new law enforcement powers and introduced the dreaded key escrow by the back door.

A great deal of hard work by our first-rate Shadow DTI team, some of whom you will hear from today, saw this removed from the e-commerce Bill – to the relief of business and the IT professionals.

The threat however, has only temporarily receded. Similar measures have re-surfaced in the Home Office Regulation of Investigatory Powers Bill, which is now before Parliament.

We support the Bill in its aim of updating existing interception law and allowing law enforcement agencies to do their job in the information age, but we will once again seek to ensure it only reaches the statute book as a help and not as a hindrance to e-business.

All businesses, new and old, are affected by the general increase in regulation and red tape. The British Chamber of Commerce has highlighted 17 major expensive new regulations that have hit firms since 1997 – including the Working Time Directive, trade union recognition and the European Social Chapter.

In our Common Sense Revolution, our Party set out some initial proposals for driving down the cost of regulation on business. We will introduce regulatory budgets for government departments by costing the regulations they currently impose on business – and then force them to cut that budget year on year. We are also considering a legislative framework under which we could exempt small businesses altogether from whole classes of regulation. We are currently consulting business about the precise categories of legislation and sizes of business to which this principle could be extended.

Some of you are no doubt a bit fed up with Politicians who tell you to reform but then do not themselves reform the way government does it’s business.

Government has a very poor record in delivering IT. Angela Browning, our Shadow Trade and Industry Secretary will talk about this in greater detail later today. Let me just say that we believe Whitehall can use the Internet to deliver faster, better and cheaper government.

Today I have touched on many of the challenges that lie ahead for all of us in this exciting new age.

Although I believe passionately the role for the state is and must remain as small as possible, the responsibility on the shoulders of politicians is great. We did not create the new economy, but get it wrong and we could certainly destroy it.

So we must get it right. We must act swiftly and decisively to let enterprise and innovation flourish. We must act swiftly to create the kind of environment in this country that really will make the UK the best place in the world to do e-business.

We must create the low tax burden and low regulation base that gives all businesses, new and old the best possible chance to succeed in the new global.

So the responsibility for politicians is great. Yet for you, for business, it is far greater still. The prosperity of our country depends on your imagination, your courage, your creativity, your skill. I know you will not let us down.